Camden Borough Council is set to save £1m a year after reorganising its IT department.
The London Borough employed Socitm Consulting to help redirect millions of pounds to frontline services.
Socitm - the Society of Information Technology Management - said IT services at Camden were previously the most decentralised in the UK. The council has already saved £600,000 in a year, and expects to save £1m annually from now on.
Socitm, the professional association for IT managers working in the public sector, provides advice and guidance on IT and e-government to local authorities, and also provides services such as consulting.
The reorganisation involves the merger of three separate service desks into one, and the consolidation of six separate technology teams into one.
Camden's aim over the next five years is to take £8m to £10m out of IT operating costs and redirect these at areas of priority.
Socitm's consulting consulting manager, Doug Mclean, said, "Camden's re-engineering of its IT service is a model for other local authorities. The vision is for Camden's IT to be enabling and transformative. The re-structure programme includes methods for capability and capacity improvements including ITIL service management, performance management and knowledge management."